Each phase in the business cycle presents unique investment opportunities. Incorporating business cycles theme into investments helps make the most of the current economic environment
Recovery & Expansion-
- Investments that are more sensitive to faster economic growth and business activity will likely outperform.
  - Stocks of midsize and small companies, as well as emerging market equities
  - Younger, growth-oriented firms and industries
- Generally referred to as Cyclical Stocks
  - Cyclical Stocks have a direct relationship to the economy. These are Companies that make or sell discretionary items and services that are in demand when the economy is doing well.
  - These are stocks which do well during phases of increased consumption and high employment. Capital Goods, Industrials and other high capex sectors tend to perform well during economic upcycle
Slowdown & Recession
- Defensive investments and those that are sensitive to falling interest rates have greater potential to outperform
  - Stocks of larger and stable companies
  - Businesses that experience steady consumer demand even during economic slowdowns
- Generally referred to as Defensive Stocks
  - Defensive/Structural growth Stocks outperform the market when economic growth slows. They produce or distribute goods and services we always need.
  - Characterized by low penetration i.e. long runway for growth, strong balance sheet and robust ESG track record.

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